Australian house prices hit new records but growth slows
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Australian capital city house prices have reached new record highs for the sixth consecutive quarter, but the pace of growth is showing signs of slowing, according to the latest Domain House Price Report.
The June quarter 2024 data reveals a mixed picture across the country, with some cities continuing to see strong gains while others experience a slowdown or decline.
Dr Nicola Powell, Domain’s Chief of Research and Economics, said the housing market remains resilient despite challenging economic conditions.
“The housing market remains resilient despite low consumer sentiment, economic pressures and high interest rates,” Dr Powell said.
Sydney house prices rose by $21,000 (1.3%) over the quarter to reach a record high of $1.66 million, though this increase was about half the rate of the previous quarter.
Melbourne achieved its strongest house price gain in 2.5 years, rising by $18,000 (1.7%) over the June quarter.
Brisbane house prices are on track to surpass $1 million next quarter, while Perth saw house prices rise by $448 per day over the past year – the steepest increase in the city’s history.
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However, not all cities experienced growth. Hobart house prices declined to a three-year low, while Darwin house prices remained flat.
The unit market showed more significant signs of slowing, with the weakest quarterly growth since early 2023 across combined capitals.
Sydney unit prices fell for the first time in 1.5 years, while Adelaide unit prices surpassed $500,000 with strong quarterly and annual gains.
Dr Powell noted that supply constraints continue to play a role in supporting prices.
“Supply still remains constrained overall, weighed against a surge in demand from strong population growth and a tight rental market,” she said.
The report also highlighted a 7% annual increase in homes on the market and a 9% increase in new listings, indicating restored vendor confidence.
However, Dr Powell warned that the persistent price growth trend may face challenges in the long term.
“The persistent price growth trend may be tempered by higher cash rates and inflation in the long run, so there might be some relief in store for those looking to enter the market,” she said.
The varied growth trends across cities reflect different supply and affordability constraints, with some markets showing signs of stretched affordability as evidenced by increased selling times.
As building approvals continue to decline, a trend observed since 2021, supply constraints are likely to continue supporting price growth in the near term.